CL&P's Profit Jump, Staffing Levels Will Draw Scrutiny

KENNETH R. GOSSELINThe Hartford Courant

The ranks of line crews at Connecticut Light & Power Co. are so thin that it's not unusual for workers to be on call eight out of 13 weekends, especially during the summer vacation season, a longtime line worker said.

"It puts a lot of pressure on your wife. She's with the kids all the time and the guy's gone again," said the worker, who asked not to be named.

CL&P isn't hurting financially, far from it: Its profits have been rising steadily since 2003. And a year ago, CL&P's parent, Northeast Utilities, showed its strength by cutting a deal to acquire a very large Boston-based utility.

But to hit those profit numbers, CL&P has pared its overall workforce by more than 10 percent in the past decade. Those cuts, and the entire operation of Berlin-based CL&P, will now come under close scrutiny amid ire over the company's response to last week's monumental power outage.

At issue in at least one upcoming sweeping inquiry into last week's response, announced Friday by Gov. Dannel P. Malloy, is the company's overall readiness to tackle major emergencies. It's a question that defies simple answers, since regulators say CL&P's day-to-day reliability has improved since 1998, and the number of line workers is actually up over the last decade.

"They seem less and less prepared and organized in the face of major weather events, compared with a decade ago," said Sen. Richard Blumenthal, D-Conn., the former longtime attorney general who was actively involved when utilities sought customer rate changes. "It's a combination of a leaner workforce, fewer workers to handle emergencies and inadequate contractual obligations outside the state."

Blumenthal said the point was driven home when he was traveling around the state last Monday to survey the storm's damage.

"Local officials were hearing that CL&P was putting together a plan," Blumenthal said. "That should have been a week before."

The frustratingly plodding pace of power restoration is being thrown into high relief, coming just seven weeks after Tropical Storm Irene knocked out power to 767,000 homes and businesses in the state. The freak October snowstorm plunged 881,000 customers into darkness in CLP's 149-town market alone.

The dynamics of the situation are more complex than CL&P's performance in power restoration. The massive outage, concentrated in the north central and western parts of the state, is drawing increased attention to just how heavily forested Connecticut is, despite it dense population. The falling trees were heavier than they might have been later in the year because many had not shed their leaves.

The state's system of municipal government also makes communication between the utility and towns and cities a time-consuming process.

CL&P insists it was prepared for the storm.

"The tree damage, I don't know how we could have planned for that," NU spokeswoman Katie Blint said. "Even though we are trimming the trees along our lines, we're not trimming the trees across the street."

Utilities in other states hit hard by the October snowstorm, including Massachusetts and New Jersey, appeared to have had more resources early in the week and restored power more swiftly, though their outages were not as big.

At the peak, Massachusetts Electric had 421,000 customers of its 1.2 million customers without power. By Thursday at 4 p.m., they had 67,900 left to connect, but the last customers were the slowest. Late Friday, there were about 32,000 still in the dark.

In New Jersey, Public Service Electric & Gas Co. estimates that 571,000 of its 2.2 million customers lost power. By Friday noon, the number of storm-related outages had fallen to 7,400.

By contrast, CL&P was struggling with outages of more than 200,000 as of late Friday night, under a self-imposed deadline of 99 percent power restoration by midnight Sunday.

Line Workers

Over the past 25 years, the number of CL&P line workers has been cut dramatically, unions representing those employees said, even as the number of utility customers has risen. The picture is less clear since 2000, as the number is up, but CL&P in mid-decade apparently failed to hire the number of workers spelled out in its rate case.

Regulatory documents show that in 2008, then-Attorney General Blumenthal complained that CL&P failed to hire new employees that were used to justify rate increases it sought, and received.

"CL&P's compliance filings on critical position hiring, for example, indicated that an aggregate of one position when the [Department of Public Utility Control] approved an expected increase of 85 positions," according to regulatory documents from a 2008 rate case decision. "Actually, for the specific position of lineman, CL&P's number of employees dropped."

Blint said that was an old case and that hiring parameters set out in the most recent rate case, in 2010, had been met — a claim backed up by a spokesman for the Public Utilities Regulatory Authority and an official with the state Office of Consumer Counsel, which represents the interests of ratepayers.

According to testimony from the hearings on utility response to Tropical Storm Irene, CL&P has actually increased the number of line workers and troubleshooters from 385 in 2001 to 422 in 2011.

"While a number of years ago, there was an issue with CL&P not keeping the number of line workers in a rate case," said Richard Sobolewski, supervisor of technical analysis at the Office of Consumer Counsel, "OCC believes that for at least the past five years the electric companies have maintained the level of line workers allowed in rates."

Moreover, CL&P officials said last week, technology advancements have made it possible for the company to avert some field work.

Still, union officials say critical line workers are stretched too thin. They say they are not equipped for full-blown power outages such as those caused by last week's snowstorm, complicating CL&P's wait for out-of-state crews.

Questioning Culture

The former federal official who volunteered to conduct an inquiry for Malloy might look broadly at the question of whether profit-driven practices by CL&P hampered the company's efforts over the last eight days. One possible example is the company's policy of not paying standby fees to contractors to put them on call for restoring power after a storm.

Paying a standby fee means the utility will have to pay the money whether or not the contractor is called to help. Blint said CL&P might reconsider that policy and others related to contractors.

"Of course, we're always open to looking at options for improvement, and once we've completed our restoration efforts, we can evaluate those options," Blint said.

At least five contractors who sent crews to help after Tropical Storm Irene said they have yet to be paid for that work, and others were working on jobs elsewhere in the Northeast.

Jeffrey Butler, the CL&P president and chief operating officer, insisted under media questioning that the company pays its bills on time.

Out-of-state crews did not start arriving until mid-week. In New Jersey, PSE&G said its out-of-state reinforcements were arriving as early as Sunday.

Frank E. Cirillo, business manager for Local 420 of the International Brotherhood of Electrical Workers in Waterbury, said the culture of the company has changed in the last decade, accelerated by management that did not rise through the ranks.

"The difference, 10 years ago, most in charge were part of the CL&P family, it was us," Cirillo said. "Now, the [NU] CEO is from Baltimore, the president of CL&P is from California."

Cirillo and Richard Sank, business manager for IBEW Local 457, which is based in Meriden and also represents CL&P workers, stopped short last week of linking lean hiring practices with the pay of top executives. They did, however, call it excessive.

Federal filings by NU show that the four highest paid executives immediately below CEO Charles W. Shivery all had sharp increases in their total compensation in 2010, two of them more than doubling. Shivery's package last year was worth $8.25 million, up from $7.8 million in 2009.

"Nobody's worth that kind of money in a state the size of Connecticut," Cirillo said. "It's shameful."